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PUC Orders Utility To File Proposal To Serve At Least 50% Of Mass Market Default Service Under ISO Market Purchases
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In a potential further expansion of the use of ISO New England market supplies to serve mass market default service, the New Hampshire PUC ordered Unitil to propose, for the August 2025 to January 2026 default service period, a procurement plan that relies on direct purchases from the ISO New England market for at least 50% of the small customer group default service load, and at least 50% of the medium customer group default service load
In New Hampshire, for the February 1, 2025, through July 31, 2025 default service period addressed by the PUC's order issued today, Unitil is relying on 30% ISO-NE "hourly" purchases for the small customer group (Residential, Rate D) and the medium customer group (G2 and OL) default service needs
In ordering a proposal for small and medium customer SOS to be served under at least 50% ISO-NE market purchases, the PUC directed Unitil to discuss, for the portion of load served by ISO-NE market purchases, the potential use of only day-ahead ISO-NE market purchases, versus sole reliance on real-time purchases, and what "additional resources", if any, the utility would need in order to rely only on day-ahead purchases
The PUC also directed Unitil to file a proposal to serve 100% of the large customer group default service load under ISO market purchases
The PUC directed that Unitil's proposal for the expanded use of ISO-NE market purchases shall use the current mechanism to establish retail default service pricing for various classes (the use of a proxy ISO-NE market price to establish a blended six-month fixed default service rate for small and medium customers, with prices for large customers determined monthly based on actual wholesale supply charges)
In addressing default service rates for the period February 1, 2025, through July 31, 2025, the PUC ordered Unitil to remove costs related to an existing under-collection reconciliation from the default service rates for this period
While new rates will be established upon a compliance filing reflecting this direction, which is to be filed by Dec. 20, the PUC said that the resulting default service rates for mass market customers under this removal are expected to be "somewhat less" than the rates previously filed by Unitil (for residential customers, this previously proposed rate was 8.616 cents per kWh as covered here)
The PUC authorized the deferral of the default service under-collections for later disposition. The deferral amounts removed from the SOS rates are $226,040 for the small customer group, $94,675 for the medium customer group, and $362,824 for the large customer group (G1)
While not deciding the issue in its instant order, the PUC ordered Unitil to file, by December 20, Unitil's opinion as to whether the default service reconciliations should be treated on a nonbypassable basis, given the "backstop" nature of default service. As previously reported, the PUC had previously directed that PSNH file a proposal to cease treating SOS reconciliations on a bypassable basis, with the reconciliations moved into the nonbypassable stranded cost charge; such matter at PSNH remains pending before the PUC
In summarizing a recent hearing regarding default service for February 1, 2025, through July 31, 2025, the PUC said that the state's Dept. of Energy and also NH's consumer advocate each expressed, as termed by the PUC, "skepticism" about creating a deferral for the SOS reconciliation
balances
The PUC said that moving to a greater use of ISO-NE market purchases for all customer classes, and a re-evaluation of the bypassable treatment for reconciliations, is appropriate due to expected increases in opt-out municipal aggregation load, and attendant lower default service sales, and due to the continued spread between higher load following wholesale supplier prices and ISO-NE market prices
Noting the rise of municipal aggregations, including in Concord and Plaistow, a witness for Unitil had stated that 75% of Unitil's customers in New Hampshire are expected to have migrated from default service by mid-2025
Docket DE 24-065
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PUC Orders Removal Of Reconciliation Costs From New Default Service Rates (Lowering Rates), Directs Proposal For Nonbypassable Cost Recovery Of SOS Reconciliations, Disposition TBD
December 12, 2024
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Reporting by Paul Ring • ring@energychoicematters.com
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